Futures (futures contracts)

- is a derivative security () that is a contractual agreement to purchase or sell a standardized quantity of a specified asset at a specified future date, at a price fixed at the time of the transaction.

There is a rule that at least two business days must elapse between the determination of the terms of the transaction and its execution, otherwise the transaction is considered immediate.

Futures have three general purposes:

The application value to market players can be one of two (or a combination):

Any futures contract has two main parameters:

Additionally there are other parameters:

The peculiarity of futures is that in this transaction we are talking about a standard quantity of goods (called contract or lot) and a specific term (called delivery date). After the expiration of the delivery date stipulated in the contract, the next one is set, and trading begins on the new instrument.

Due to the fact that the price of a futures contract is set at the time of the transaction and does not change until the day of execution (regardless of what the underlying asset prices are), they are often used by sellers to insure their own risks when trading various instruments and commodities, which is called hedging.

Futures contracts are especially popular among traders who profit from fluctuations in exchange prices, as they have a number of advantages over conventional stock trading (namely, low commission, increased leverage, the procedure of accrual of exchange rate differences, etc.).

In Russia, the futures market (Forts) is represented by the Moscow Exchange. Futures on shares, bonds, commodities, energy, currency pairs and indices are available on the futures exchange.

The most liquid instruments are:

Futures contracts are very liquid, volatile and quite risky, so novice investors and traders should not deal with them without proper preparation.